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New Homes for Excess Goods

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Your beat-up boiler may be beautiful to someone else. Just in time for spring cleaning, a growing crop of online surplus exchanges is allowing for the B2B equivalent of a neighborhood yard sale in the typically inefficient, $350 billion used capital assets and excess inventory market.

For a nominal listing fee and a 5 percent brokerage fee on sales, such Web sites as TradeOut.com, DoveBid.com, and iMark.com give businesses the chance to present everything from old office cubicles to idle machinery before a large, easily gathered universe of buyers. The online exchanges offer lower selling costs than traditional broker channels, and potentially higher prices for goods that often languish in warehouses.

"It will give you a better chance of freeing the cash you have tied up in unproductive assets to direct toward productive assets," TradeOut.com CFO Jim Mooney says. For example, one of the site's sellers had miles of fiber- optic cable in storage for two years because it couldn't find a buyer. Within two weeks of its posting on TradeOut.com's online auction block, the cable sold for $2.2 million.

The TradeOut.com Web site, with investment and consultation from consumer auction site Ebay, was launched in June 1999. By contrast, DoveBid.com is the Web child of a 63-year-old capital asset auctioneering business run by the California-based Dove brothers.

"We didn't build the site to find buyers; we built it for our buyers," says DoveBid.com CEO Ross Dove. The universe of potential buyers expanded even further with the late February premiere of DoveBid.com's Webcasts--on- location auctions that offer real-time participation to online users. At Packard Bell's recent Webcast auction, the number of online bidders was 50 percent higher than the number of on-location bidders, and brought in $500,000 above the amount the company had expected from its lot, according to Dove.

While the surplus exchange sites may appear to be competing with one another, each one takes a slightly different niche market, notes Leah Knight, principal analyst for Gartner Group Inc. DoveBid.com focuses on used capital assets in the high-tech industry; iMark focuses on industrial equipment surplus; and TradeOut.com boasts 100 product categories across many industries. Meanwhile, a new crop of industry-specific surplus exchange sites, such as RetailExchange.com for the retail industry and UsBid.com for the electronics industry, is emerging.

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